Donaldson kept his cool to tuck home a rebound and lift Birmingham above the Millers in the table.
Backed by more than 2,500 fans, Birmingham had the better of the opening exchanges and produced the first effort on goal through Stephen Gleeson’s free-kick.
His 25-yard effort did not have enough on it to trouble Rotherham goalkeeper Adam Collin.
At the other end Ben Pringle picked out Jonson Clarke-Harris in space with a wonderful pass, but the striker let the ball run across him and in the end could only produce a cross that was cleared.
Andrew Shinnie was inches away from giving the away side the lead. Donaldson laid on the chance after holding the ball up well on the edge of the area before Shinnie dodged a tackle before striking a post with a curling effort.
Birmingham continued to look dangerous. Donaldson held off Craig Morgan to produce another save from Collin before Demarai Gray tested the home keeper from distance. Collin then had to be alert to deny David Cotterill from a free-kick.
Kari Arnason’s long throws were a useful weapon for Rotherham and one particular launch was almost flicked in by Alex Revell.
Birmingham were denied by the woodwork again before half-time after Cotterill’s thunderous effort ricocheted off the bar and away to safety.
Clarke-Harris and Paul Taylor then had efforts on goal for Rotherham as the half finished with end-to-end action.
Rotherham’s Saturday morning loan signing Emmanuel Ledesma was brought on for Taylor at the start of the second period, but it was Birmingham’s winger Gray causing the early trouble.
After being found by Shinnie, Gray put in a teasing ball across the six-yard box, but it evaded both attack and defence.
Ledesma’s first involvement was to pick out Clarke-Harris, who could only direct his header straight at Birmingham keeper Darren Randolph.
But Birmingham took the lead after 62 minutes when Donaldson finally finished off the best chance of the match
Put through by Shinnie, Donaldson was first denied by a wonderful save by Collin, but the ball fell kindly back to the striker and he powered a shot beyond the keeper and the recovering defenders.
Rotherham had their complaints about the goal as they believed Revell had been fouled in the opposing area earlier in the move and the home bench and fans voiced their displeasure at the award of the goal.
The home side should have levelled when a free-kick was only half cleared and the ball fell kindly to substitute Paul Green, but he disappointedly dragged his shot wide from 10 yards.